Question

The Hirt & Block mutual fund has assets of $147 million, liabilities of $7 million and 7 million shares outstanding. The shares trade at $21.60 per share. What is the percentage load fee?

Answer 1

Answer: 8%

Step-by-step explanation:

The load fee would be the excess percentage amount charged on the share over the Net Asset Value per share.

=
`(Trading price per share - Net Asset Value per share)/( Net Asset Value per share)`

Net Asset value Per share = (Assets - Liabilities) / Number of shares

= (147 - 7) / 7

= $20

Load fee

=
`(Trading price per share - Net Asset Value per share)/( Net Asset Value per share)`

=
`(21.60 - 20)/(20)`

= 8%